Understand the growing need for better project, program, and portfolio management

project managment chapter 1

1. Note: See the text itself for full citations. Text website is http://intropm.com.

2. Copyright 2021 Schwalbe Publishing
Understand the growing need for better project,
program, and portfolio management
Explain what a project is, provide examples of
projects, list various attributes of projects, and
describe project constraints
Define project management and discuss key
elements of project management using a process-
oriented approach and a principle-based approach
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Discuss the relationship between project, program, and
portfolio management and their contributions to
enterprise success
Understand important agile concepts
Explain the differences between predictive, agile, and
hybrid approaches to project management
Describe the project management profession, including
the role of project managers and suggested skills, the
role of professional organizations, the importance of
certification and ethics, project management careers, and
the growth of project and portfolio management software
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Many organizations today have a new or renewed interest in
project management (PM). Why?
Demand for projects continues to increase. GDP
contributions from project-oriented industries are
forecasted to reach US$34.5 trillion by 2030. Employers will
need 25 million new individuals working in project
management-oriented roles by 2030.
2020 proved that projects matter now more than ever.
Agile organizations respond better to change.
Good project management helps the bottom line. An
average 11.4 percent of investment is wasted due to poor
project performance.
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Project management salaries continue to grow. The
average total compensation for project management
workers in the U.S. in 2019 was $124,000.
Certification is a good investment. People with the
PMP
®
credential reported salaries 22% higher on
average than those without it.
Project management is also a vital skill for personal
success.
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A 1995 Standish Group study (The CHAOS Report) found
that only 16.2percent of information technology (IT)
application development projects were successful in
meeting scope, time, and cost goals. Over 31 percent of
the projects were canceled before completion, costing
over $81 billion in the U.S. alone.
In a 2019 study by three global associations (KPMG,
AIPM, and IPMA) only 19% of organizations delivered
successful projects (defined as meeting scope, time, cost,
and stakeholder satisfaction goals) most of the time.
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Better control of financial, physical, and human
resources
Improved customer relations
Shorter development times
Lower costs
Higher quality and increased reliability
Higher profit margins
Improved productivity
Better internal coordination
Higher worker morale
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A projectis “a temporary endeavor undertaken to
create a unique product, service, or result”*
Operations is work done to sustain the business
Projects end when their objectives have been
reached, or the project has been terminated
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Project Management Institute, Inc., The Standard for Project Management,
Seventh Edition (2021), p. 4.

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A young couple hires a firm to design and build them a new house
A retail store manager works with employees to display a new
clothing line in the store and online to attract new customers
A school district upgrades its technology infrastructure to provide
wireless Internet access for all students in school and from home
A medical technology firm develops a device that connects to
smart phones
A pharmaceutical company launches a new drug or vaccine
A television network develops a system to allow viewers to vote
for contestants and provide other feedback on programs via
several devices
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A project:
◦Has a unique purpose
◦Is temporary
◦Drives change and enables value creation
◦Is developed using progressive elaboration or in an iterative
fashion
◦Requires resources, often from various areas
◦Should have a primary customer or sponsor
The project sponsorusually provides the direction and funding for the
project
◦Involves uncertainty
Project managerswork with the project sponsors, the project team, and the
other people involved in a project to define, communicate, and meet project
goals.
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Every project is constrained in different ways. Some project
managers focus on the triple constraint (meeting scope, time,
and cost goals)
◦Scope: What work will be done as part of the project? What unique
product, service, or result does the customer or sponsor expect from
the project?
◦Time: How long should it take to complete the project? What is the
timeline?
◦Cost: What should it cost to complete the project? What is the
project’s budget? What resources are needed?
Other constraints include quality, risk, and resources
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Project managementis “the application of
knowledge, skills, tools and techniques to project
activities to meet project requirements.”*
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*Project Management Institute, Inc., The Standard for Project Management,
Seventh Edition(2021), p. 4.

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Stakeholders are the people involved in or affected
by project activities
Stakeholders include:
◦The project sponsor
◦The project manager
◦The project team
◦Support staff
◦Customers
◦Suppliers
◦Opponents to the project
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1.Project integration management is an overarching function
that coordinates the work of all other knowledge areas. It
affects and is affected by all of the other knowledge areas.
2.Project scope management involves working with all
appropriate stakeholders to define, gain written agreement for,
and manage all the work required to complete the project
successfully.
3.Project time management includes estimating how long it will
take to complete the work, developing an acceptable project
schedule given cost-effective use of available resources, and
ensuring timely completion of the project.
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4.Project cost managementconsists of preparing and managing
the budget for the project.
5.Project quality management ensures that the project will
satisfy the stated or implied needs for which it was
undertaken.
6.Project resource management is concerned with making
effective use of the people and physical resources needed for
the project.
7.Project communications management involves generating,
collecting, disseminating, and storing project information.
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8.Project risk management includes identifying, analyzing, and
responding to risks related to the project.
9.Project procurement management involves acquiring or
procuring goods and services for a project from outside the
performing organization.
10.Project stakeholder management focuses on identifying
project stakeholders, understanding their needs and
expectations, and engaging them appropriately throughout
the project.
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Project management tools and techniques assist project
managers and their teams in various aspects of project
management.
Note that a tool or technique is more than just a software
package.
Specific tools and techniques include:
◦Project charters, scope statements, and WBS (scope)
◦Gantt charts, network diagrams, critical path analyses (time)
◦Net present value, cost estimates, and earned value
management (cost)
◦Agile projects often require product roadmaps, backlogs,
burndown charts, retrospectives, etc.
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There are different ways to define project success:
◦The project provided value. Value is “the worth,
importance, or usefulness of something.”*
◦The project met scope, time, and cost goals.
◦The project satisfied the customer/sponsor.
One method used to measure customer satisfaction is a net
promoter score, a number that represents the customer’s
willingness to recommend a product or service to others.
◦The project produced the desired results.
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What Went Right? Improved
Project Performance
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Follow-up studies by the Standish Group showed some
improvement in the statistics for IT projects:
The number of successful projects has increased, from 16
percent in 1994 to 29 percent in 2015
The number of failed projects decreased from 31 percent in
1994 to 19 percent in 2015
62% of small projects were successful from 2011-2015
compared to only 2% of grand, 6% of large, 9% of medium, and
21% of moderate size projects
39% of all agile projects were successful compared to 11% of
waterfall projects.
In 2021 the Standish Group website states that 31% of software
projects are successful (an increase from the 29% reported in
2015). They also say that 46% of the successful projects
returned high value to the organization.

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Principlesfor a profession serve as foundational
guidelines for strategy, decision making, and problem
solving.
A project performance domain is a group of related
activities that are critical for the effective delivery of
project outcomes.
Tailoringis the deliberate adaptation of the project
management approach, governance, and processes to
make them more suitable for the given environment
and the work at hand.
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A modelis a thinking strategy to explain a process,
framework, or phenomenon (for example, leadership
models, change models, etc.)
A methodis the means for achieving an outcome,
output, result, or project deliverable (like tools and
techniques –methods for estimating, meeting, etc.)
An artifactcan be a template, document, output, or
project deliverable (for example a project charter,
product backlog, contract, etc.)
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A programis a group of related projects, subsidiary
programs, and program activities managed in a
coordinated manner to obtain benefits not available
from managing them individually.
A megaprojectis a very large project that typically
costs over US $1 billion, affects over one million
people, and lasts several years.
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Popular Mechanics provides a list (including photos) of the 25
most impressive megaprojects throughout the world. Several are
listed below, showing the time and cost required to complete
them (US$):
Panama Canal Expansion Project, Panama, Central America:
11 years, $5.25 billion. The original canal was built in 1914. The
expansion project widened and deepened the canal to allow for
larger ships.
Port Mann Bridge, Vancouver, British Columbia, Canada: 6
years, $1.92 billion. Port Mann Bridge is the second largest
bridge in North America, spanning 6,866 feet.
Three Gorges Dam, China: 17 years, $22 billion. This dam on
the Yangtze River is 595 feet tall, 131 feet wide, and over
7,600 feet long, with 32 main turbines producing electricity.
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A portfoliois defined as a collection of projects, programs,
subsidiary portfolios, and operations managed as a group to
achieve strategic objectives.
Many organizations support an emerging business strategy of
project portfolio management by continuously selecting and
managing the optimum set of projects and programs to
deliver maximum business value.
The main distinction between project or program management
and portfolio management is a focus on meeting tactical
versus strategicgoals.
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Project and program management address
questions like:
◦Are we carrying out projects well?
◦Are projects on time and budget?
◦Do project stakeholders know what they should be doing?
Portfolio management addresses questions like:
◦Are we working on the right projects?
◦Are we investing in the right areas?
◦Do we have the right resources to be competitive?
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There are several different definitions of agile.
◦The Agile Alliance (2021) defines agileas “the ability to create and respond
to change.”
◦Merriam-Webster dictionary (2021) defines agile as “marked by ready ability
to move with quick easy grace,” like an agile dancer.
◦PMI’s Agile Practice Guide (2017) defines agile as “a term used to describe
a mindset of values and principles as set forth in the Agile Manifesto.”
Scrum, the most popular framework, is a lightweight framework that
helps people, teams and organizations generate value through
adaptive solutions for complex problems.
It is based on the idea of iterative and incremental development.
Scrumteams work in short cycles called sprints, and each sprint
focuses on delivering a working product increment.
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Manifesto for Agile Software Development
We are uncovering better ways of developing software by doing it
and helping others do it. Through this work we have come to
value:
-Individuals and interactions over processes and tools
-Working software over comprehensive documentation
-Customer collaboration over contract negotiation
-Responding to change over following a plan
That is, while there is value in the items on the right, we value the
items on the left more

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Principles behind the Agile Manifesto
We follow these principles:
1.Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
2.Welcome changing requirements, even late in development. Agile processes harness change for the
customer's competitive advantage.
3.Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to
the shorter timescale.
4.Business people and developers must work together daily throughout the project.
5.Build projects around motivated individuals. Give them the environment and support they need, and trust
them to get the job done.
6.The most efficient and effective method of conveying information to and within a development team is
face-to-face conversation.
7.Working software is the primary measure of progress.
8.Agile processes promote sustainable development. The sponsors, developers, and users should be able to
maintain a constant pace indefinitely.
9.Continuous attention to technical excellence and good design enhances agility.
10.Simplicity--the art of maximizing the amount of work not done--is essential.
11.The best architectures, requirements, and designs emerge from self-organizing teams.
12.At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior
accordingly.
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Gil Broza, author of “The Agile Mind-Set” (2015),
emphasizes the need to focus on values, beliefs, and
principles before following specific frameworks or
processes.
Organizations with an agile mindset, in contrast to a
bureaucratic one, use a network of teams focused on
the goal of delivering value to their customers. Work
is best accomplished through small, self-organizing
teams working in short cycles to deliver something of
value to the customer.
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In predictive project management, also called waterfallor
traditionalproject management: most of the project planning is
done upfront, there is a single final product, service, or result
delivered at the end of the project, change is constrained,
costs and risks are controlled, and stakeholders are involved
at specific milestones.
In Agile project management, also called adaptiveproject
management: the project scope cannot be well-defined
upfront, incremental releases are desired, and changes are
expected.
The term hybrid project management is a mixture or
combination of and predictive and agile approaches.
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A 2021 research report based on 477 projects in various
industries found that 52%of the projects could be
categorized as using a hybrid project management
approach.
•Project management approach was not associated with project
performance in terms of meeting traditional scope, time, cost, and
quality goals.
•Projects managed using agile and hybrid approaches
significantly outperformed predictive approaches when it came to
stakeholder success, measured as a combination of sponsor, client,
and team satisfaction with the project.
•“Hybrid approaches were found to be similar in effectiveness to
fully agile approaches. Results validate decisions by practitioners to
combine agile and traditional practices and suggest that hybrid is a
leading project management approach.”
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Project, program, and portfolio managers need to
develop specific skills
Certification is available for project managers
There are many software tools to assist in project,
program, and portfolio management
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Knowledge of the following:
•All ten project management knowledge areas and the eight
project performance domains, tools, and techniques
•The application area (domain, industry, market, etc.)
•The project environment (politics, culture, change
management, etc.)
•General business (financial management, strategic planning,
etc.)
•Human relations (leadership, motivation, communication,
etc.)
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1.Technical project management skills:Understanding the
knowledge areas, process groups, and project management
tools and techniques fall into this category.
2.Strategic and business management skills:Topics include
strategic planning, financial management, accounting,
marketing, and other topics.
3.Leadership skills: Providing vision and inspiration to
people.
A leaderfocuses on long-term goals and big-picture
objectives while inspiring people to reach those goals. A
managerdeals with the day-to-day details of meeting
specific goals; Project managers often take on both roles!
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Program managers normally have experience as
project managers. They often rely on their past
experience, strong business knowledge, leadership
capability, and communication skills to manage
programs
Portfolio managers must have strong financial and
analytical skills and understand how projects and
programs can contribute to meeting strategic goals
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A best practice is “an optimal way recognized by industry to
achieve a stated goal or objective.”
Robert Butrick suggests that organizations need to follow basic
principles of project management:
●Make sure your projects are driven by your strategy. Be able to
demonstrate how each project you undertake fits your business strategy,
and screen out unwanted projects as soon as possible.
●Engage your stakeholders. Ignoring stakeholders often leads to project
failure. Be sure to engage stakeholders at all stages of a project, and
encourage teamwork and commitment at all times. Use leadership and
open communications to make things happen.**
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PMI provides certification as a Project Management
Professional (PMP)
A PMP has documented sufficient project
experience, agreed to follow a code of ethics, and
passed the PMP exam
The number of people earning PMP certification is
increasing quickly
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-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
200020012002200320042005200620072008200920102011201220132014201520162017201820192020
Growth in PMP Certification 2000-2020*
*
*2020 data is through September 30, 2020, the last data reported in PMI Today.

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PMI provides several other certifications
In 2021, Google launched a project management certification as part
of their “Grow with Google” program.
PRINCE2, or Projects in Controlled Environments, is a process-
based method for effective project management known across the
world. Over 1 million people have their certification.
In 2021 Scrum.org announced that there were over 557,000
professional scrum certifications held throughout the world.
The International Project Management Association (IPMA) provides
several levels of certification based on successful experience in
managing projects. In 2021 they announced that they had over
320,000 certified project professionals.
CompTIA offers the Project+ focused on business professionals
managing small-to medium-sized projects.
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As a student, you can join PMI for a reduced fee ($32
vs. $139 in 2021)
Also consider earning the Certified Associate in
Project Management (CAPM) credential from PMI
If you complete a bachelor’s degree, you do not
need any work experience to earn the CAPM
However, if you have enough work experience, the
PMP is more marketable
https://www.pmi.org/certifications
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Ethics—a set of principles that guide our decision
making based on personal values of what is “right”
and “wrong” —is an important part of all professions
Project managers often face ethical dilemmas.
PMI has a Code of Ethics and Professional Conduct
which applies not only to PMP
®
s, but to all PMI
members and individuals who hold a PMI certification,
apply for a PMI certification, or serve PMI in a
volunteer capacity.
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By 2027, employers will need 87.7 million individuals
working in project management-oriented roles.”
In June 2020, LinkedIn listed project management
jobs as #3 in the top 10 jobs identified as having
the greatest number of openings, steady growth,
and a livable wage.
Sixty percent of hiring managers say interest in
project management careers among younger job
applicants has grown over the past decade.
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Many people start off leading a small project related to
their current job, part-time, to make sure they are cut out
for and enjoy the work.
Some organizations require their people to have a few
years of experience before they let them lead any
projects. Others hire entry-level people with the title of
project coordinator or project manager.
Many organizations realize that they need to provide a
structured career path to develop and maintain their
talent pipeline for project managers. Some organizations
have different levels of project managers, often based on
knowledge and experience.
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Therearehundredsofdifferentproductsavailabletoday
A2020reportestimatesthattheglobalprojectportfolio
management(PPM)marketsizewillreachUSD11.4billionby
2027,acompoundannualgrowthrateof13.4%from2020to
2027.
◦“Project-intensiveorganizationsacrossdifferentindustryverticalshave
recognizedtheadvantagesofthePPMsolutionandhaveemployeditto
automateandsimplifyseveraloperationsandefficientlymanageproject
lifespan.
◦ThePPMsolutionoffersmanagersandorganizationswiththecapability
toseethebigpicture,confirmingtheuseofbestpractices,principles,
solutions,andstandardsduringtheprojectlifespan…thebenefits
offeredbyPPMsolutionsarepropellingthegrowthofthismarket.”
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Demand for software to help manage agile projects
has also increased.
95% of people reported their organizations practiced
some agile development methods, even though about
half said that most of their teams were not agile.
They reported using a wide variety of software tools.
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67%
40%
23%
19%
12% 12%
9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Atlassian JIRAMicrosoft ExcelMicrosoft Azure
DevOps
Google Docs VersionOne Other Microsoft Project
Percentage of Respondents Using Tool

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A 30-day evaluation copy of many tools, such as
Microsoft Project and MindView, are available from
their company websites.
Other tools, including Jira, Asana, and Basecamp,
provide trial versions of their software for unlimited
timeframes.
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A project is a temporary endeavor undertaken to create a unique product,
service, or result
Project management is the application of knowledge, skills, tools, and
techniques to project activities to meet project requirements
Many organizations today are using an agile/adaptive or a hybrid approach
instead of a predictive/waterfall/traditional approach to managing projects.
It is important to use an agile mindset first to help agile projects succeed.
The terms agile or adaptive project management describes an approach
where the project scope cannot be well-defined upfront, incremental
releases are desired, and changes are expected.
A program is a group of related projects, subsidiary programs, and program
activities managedin a coordinated manner to obtain benefits not available
from managing them individually
Project portfolio management involves organizing and managing projects and
programs as a portfolio of investments that contribute to the entire
enterprise’s success
The project management profession continues to grow and mature, and
demand for project managers is high
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